Download Understanding Marketing and the Marketing Process

Chapter 2 - Strategic Planning and the Marketing Process
Formal Planning
Many companies operate without formal plans, yet these plans can provide many benefits such as:
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Strategic Planning - is the Process of Developing and Maintaining a Strategic Fit Between the Organization’s
Goals and Capabilities and Its Changing Marketing Opportunities.
and Capabilities and Its Changing Marketing Opportunities.
Steps in Strategic Planning(Fig. 2.1)
The Mission Statement - a formal statement that describes what management wants the organization to be and the
guidelines for getting there.
Components of a Good Mission Statement
Examples of a Mission Statement
Organizational Objectives
Organizational Strategies
Designing the Business Portfolio
The business portfolio is the collection of businesses and products that make up the company.
 The company must:
 analyze its current business portfolio or Strategic Business Units (SBU’s)
 decide which SBU’s should receive more, less, or no investment
 develop growth strategies for adding new products or businesses to the portfolio
Analyzing Current SBU’s: Boston Consulting Group (BCG) Approach
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Analyzing Current SBU’s: GE’s Strategic Business-Planning Grid
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Average
Weak
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Problems With Matrix Approaches
Developing Growth Strategies in the Age of Connectedness
Existing Products
Existing
Markets
New
Markets
New Products
The Marketing Process (Fig. 2.5)
Connecting With Customers
 Market Segmentation: determining distinct groups of buyers (segments) with different needs,
characteristics, or behavior.
 Market Targeting: evaluating each segment’s attractiveness and selecting one or more segments to enter.
 Market Positioning: arranging for a product to occupy a clear, distinctive, and desirable place relative to
competing products in the minds of target consumers.
The 4 P’s & 4C’s of the Marketing Mix
4 P’s
 Product
 Price
 Place
 Promotion
4 C’s
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Customer Solution
Customer Cost
Convenience
Communication
Managing the Marketing Effort (Fig 2.7)
Marketing Analysis of Company’s Situation
Marketing
Implementation
Marketing
Planning
Control
Measure
Develop Strategic
Plans
Results
Carry Out
The
Plans
Develop
Marketing
Plans
Contents of a Marketing Plan (Table 2.2)
Executive Summary
Current Marketing Situation
Threats and Opportunity Analysis
Objectives and Issues
Marketing Strategy
Action Programs
Budgets
Controls
Evaluate
Results
Take Corrective
Action
Chapter 3 - The Marketing Environment
Marketing Environment- consists of the actors and forces outside marketing that affect marketing
management’s ability to develop and maintain successful relationships with its target customers.
Includes:
Microenvironment –
Macroenvironment Company’s Internal Environment - functional areas inside a company that have an impact on the
marketing department’s plans.
Figure 3.1
Suppliers - provide the resources needed to produce goods and services and are an important link in the
“value delivery system”.
Marketing Intermediaries - help the company to promote, sell, and distribute its goods to final buyers.
i.e. resellers.
Customers - five types of markets that purchase a company’s goods and services.
Figure 3.2
Competitors - those who serve a target market with similar products and services against whom a
company must gain strategic advantage.
Publics - any group that perceives itself having an interest in a company’s ability to achieve its objectives.
Figure 3.3
Major Forces in the Company’s Macroenvironment
Demographic - studies populations in terms of size, density, location, age, gender, race, occupation and
other statistics.
Economic - factors that affect consumer purchasing power and spending patterns.
Natural - natural resources needed as inputs by marketers or that are affected by marketing activities.
Key U.S. Demographic Trends
 Changing Age Structure
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Changing American Family
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Geographic Shifts
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Better-Educated & More White-Collar
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Increasing Diversity
Age Distribution of the U.S. Population
 Baby Boomer Generation
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Generation X
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Echo Boomer Generation (generation Y)
Economic Development
Changes in Income: Value Marketing
Changing Consumer Spending Patterns
Key Economic
Concerns for
Marketers
Factors Affecting the Natural Environment
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The Company’s Macroenvironment
Technological - forces that create new technologies, creating new product and market opportunities.
Political - laws, agencies and pressure groups that influence and limit organizations and individuals in a
given society.
Cultural - institutions and other forces that affect a society’s basic values, perceptions, preferences, and
behaviors.
Technological Environment
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Political Environment - Includes Laws, Government Agencies, Etc. that Influence & Limit
Organizations/ Individuals in a Given Society
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Cultural Environment – cultural values of a society
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Responding to the Marketing Environment
Advertorials
Chapter 7 –Market Segmentation, Targeting, and Positioning for
Competitive Advantage
Steps in Market Segmentation, Targeting, and Positioning (Fig. 7.1)
Market Segmentation
1. Identify bases for segmenting the market
2. Develop segment profiles
Market Targeting
3. Develop measure of segment attractiveness
4. Select target segments
Market Positioning
5. Develop positioning for target segments
6. Develop a marketing mix for each segment
Step 1. Market Segmentation - Levels of Market Segmentation
Through Market Segmentation, Companies Divide Large, Heterogeneous Markets into Smaller Segments that Can
be Reached More Efficiently And Effectively With Products and Services That Match Their Unique Needs.
Mass Marketing –
Segment Marketing –
Niche Marketing – focusing on subsegments or niches with distinctive traits
Micromarketing – tailoring to the needs of individuals and locations
local -
individual -
Geographic Segmentation
World Region or Country
City or Metro Size
Density or Climate
Demographic Segmentation
Dividing the market into groups based on variables such as:
Age
Family size or life
Occupation
Gender
cycle
Education
Income
Religion
Race
Generation
Nationality
Psychographic Segmentation
Divides Buyers Into Different Groups Based on:
Behavioral Segmentation
Dividing the market into groups based on variables such as:
Occasions
Usage rate
Benefits
Loyalty status
User status
Readiness stage
Attitude toward product
How could you segment the following markets?
Segmentation Profile - Good segmentation analysis develops profile of consumer group which considers all
relevant segmentation variables.
Requirements for Effective Segmentation
_______________ - Size, purchasing power, profiles of segments can be measured.
_______________ - Segments can be effectively reached and served.
_______________ - Segments are large or profitable enough to serve.
_______________ - Segments must respond differently to different marketing mix elements & programs.
_______________ - Effective programs can be designed to attract and serve the segments.
Step 2. Market Targeting - Evaluating Market Segments
Segment Size and Growth - Analyze current sales, growth rates and expected profitability for various segments.
Segment Structural Attractiveness - Consider effects of: competitors, availability of substitute products and, the
power of buyers & suppliers.
Company Objectives and Resources - Company skills & resources needed to succeed in that segment(s). Look
for Competitive Advantages.
Market Coverage Strategies
Choosing a Market-Coverage Strategy
Company Resources
Product Variability
Product’s Stage in the Life Cycle
Market Variability
Competitor’s Marketing Strategies
80 - 20 Rule
Positioning
Perceptual vs. Physical
Product’s Position - the way the product is defined by consumers on important attributes - the place the product
occupies in consumers’ minds relative to competing products.
Marketers must:
Identifying Possible Competitive Advantages
Key to winning and keeping customers is to understand their needs and buying processes better than competitors do
and deliver more value.
Competitive advantage is an advantage over competitors gained by offering consumers greater value, either
through lower prices or by providing more benefits, that justify competitive advantage,
Product Differentiation -
Services Differentiation –
Image Differentiation –
Personnel Differentiation –
Chapter 20 – Marketing and Society
Ben & Jerry’s
Marketing’s Impact on Individual Consumers
Criticisms Leveled at the Marketing Function by Consumers and Others:
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Marketing’s Impact on Society as a Whole
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Marketing’s Impact on Other Businesses
All Can Harm Other Companies & Reduce Competition
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What company has been charged with these violations?
Consumerism
Consumerism is an Organized Movement of Citizens and Government Agencies to Improve the Rights and Power
of Buyers in Relation to Sellers.
Basic Consumer Rights
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Marketing Ethics
Companies Need to Develop Corporate Marketing Ethics Policies – Broad Guidelines That Everyone in the
Organization Must Follow and Should Address:
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Principles That Should Guide Companies and Marketing Managers On Issues of Ethics and Social Responsibility: